House of Commons
Prayers
This information is provided by Parallel Parliament and does not comprise part of the offical record
Oral Answers to Questions
(4 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Kim Johnson (Liverpool, Riverside) (Lab)
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
Steve McCabe (Birmingham, Selly Oak) (Lab)
The Chancellor of the Exchequer (Rishi Sunak)
The Government, of course, recognise that inflation is rising and are closely monitoring the situation together with the Bank of England. We are also putting in place policies to help families meet the rising cost of living, such as freezing duties, cutting the tax rate in universal credit and increasing the national living wage. Last month I announced to this House a £9 billion package of support to help households with rising energy bills.
Kim Johnson
The question was about what assessment has been made. The Resolution Foundation predicts that inflation will rise above 8% but benefits will increase by only 3%. Liverpool has some of the most deprived communities in this country, with 33% of children in my Riverside constituency suffering poverty. Does the Chancellor believe that now is not the time to increase national insurance contributions while the cost of living is increasing, forcing people into poverty at the highest level since the 1970s? Will he commit to putting measures in place in the spring statement?
Rishi Sunak
The hon. Lady talks about children in poverty, and I am pleased that there are now 300,000 fewer children in poverty than in 2010 thanks to the actions of Conservative-led Governments. We all know that the best way to ensure the children do not grow up in poverty is to ensure that they grow up in a house where people work, and that is why I was delighted this morning to learn that there are record numbers of people on payroll.
Gerald Jones
Citizens Advice has told me that one in six people in my constituency of Merthyr Tydfil and Rhymney are unable to pay their energy bills right now, and that is before they spike next month and before the Chancellor’s national insurance hike. Some 86% of people said that they did not think that the October energy loan scheme would make a difference in helping to pay their bills. The conflict in Ukraine will inevitably lead to a further surge in energy prices, so if he will not accept Labour’s suggestion of a windfall tax on oil and gas producers, what exactly will the Chancellor do now to relieve the pressures on people in my constituency and across the country?
Rishi Sunak
We are putting in place support to help households meet the rising cost of energy bills, and £9 billion of support will help to ensure that four out of five households in England will receive £150 starting this April, with a further £200 of support towards the autumn. Of course, councils have been given extra money for discretionary funding to help households in need as well.
Ms Rimmer
Since the Chancellor announced his household loan scheme in response to the energy crisis as well as a huge rise in national insurance, the world has changed. Other Departments have adapted to the Russian invasion of Ukraine. When will the Treasury?
Rishi Sunak
With regard to the Russian invasion of Ukraine, the Treasury has been hard at work with our international partners to put in place the most comprehensive set of economic sanctions that this country has ever had and that Russia has ever experienced. I am very proud of the job we have done.
Steve McCabe
If the Chancellor had appreciated last autumn the extent to which energy costs and other household bills would rise, would he still have advocated a national insurance rise?
Rishi Sunak
We have reacted to rising energy bills by putting in place £9 billion of support, which will get to households far faster than the proposals put forward by the Opposition, with the £150 reaching four out of five households just this April when the price cap goes up. It is also worth bearing it in mind that, because of the price cap, households will be protected from further increases all the way through to the autumn.
Jake Berry (Rossendale and Darwen) (Con)
The cost of fuel is now an eye-watering £2 a litre in some areas, which has led to a huge VAT windfall for the Treasury. When the Chancellor thinks about his spring statement, will he look not just at cutting fuel duty but at mileage recovery rates? They have been at 45p a mile for more than a decade. Now is the time to put them up to 60p at least.
Rishi Sunak
I am grateful to my right hon. Friend for his suggestions, and of course I will bear them in mind. He is right about the rising cost of fuel at the pumps, although I am pleased to see that over the last few days, the price of Brent has fallen by about 25%, illustrating the volatility of the situation.
Fay Jones (Brecon and Radnorshire) (Con)
The cost of living is biting hard in Brecon and Radnorshire. Heating oil is eye-wateringly expensive and extremely hard to come by, while a local haulage firm in Llandrindod Wells is coughing up an extra £60,000 per month on diesel. It is wrong to assume that those who live in rural areas are wealthy enough to withstand these pressures, so can my right hon. Friend reassure my constituents that he has them in mind as he considers all the options available to him?
Rishi Sunak
I can give my hon. Friend that reassurance. Representing as I do a rural constituency like hers, I know the difficulty that our constituents are facing. That is why our £9 billion package of support for energy that I announced earlier is done by electricity meter, ensuring that those who are off the gas grid also benefit.
Mr Mark Harper (Forest of Dean) (Con)
The impact on energy prices of the Russian invasion of Ukraine and the sanctions will inevitably mean that Britain is poorer. There is nothing that we can do about that overall, but we can help to smooth the impact. I welcome the announcement this morning that there are 275,000 extra people on payroll. What more can the Chancellor do to improve companies’ ability to hire workers and to enable people to keep more of their own money; for example, through the reduction in the taper rate on universal credit?
Rishi Sunak
I am grateful to my right hon. Friend for his typically thoughtful question. He is absolutely right about the circumstances we face. The data this morning shows record numbers of people on payroll, and that is to be welcomed. Indeed, the unemployment rate is now back to the levels we saw before the pandemic, thanks to our plan for jobs. There are record vacancies, and we want to get people into work. The best way to do that is to give them the skills they need and cut taxes to increase incentives. That is exactly what this Government are doing, and I expect us to make more progress in the months ahead.
Harriett Baldwin (West Worcestershire) (Con)
With council tax being one of the biggest items in household budgets, could the Chancellor remind the House which party tends to be the best, in a local council, for setting council tax?
Rishi Sunak
My hon. Friend makes an excellent and timely point. She knows that I know that, in this country, if people want good local services delivered for the lowest possible council tax, they need to vote Conservative.
Mr Speaker
You should not make the Chancellor blush.
I call the shadow Minister, Pat McFadden.
Mr Pat McFadden (Wolverhampton South East) (Lab)
The package on energy announced by the Chancellor last month has already been rendered obsolete by Russia’s invasion of Ukraine. Some estimates of average annual household energy bills suggest that there will be rises to £3,000 or even more from October. That is a ruinous figure for many of our constituents. Will the Chancellor revisit this support package in next week’s spring statement, and will he reconsider his refusal to fund help for hard-pressed households through a windfall tax on the enormous profits that oil and gas companies are making?
Rishi Sunak
It is worth bearing it in mind that, because of the price cap, households will be protected all the way through the autumn. We do not know what the price cap will be at that point. If the right hon. Gentleman knows, he is probably in the wrong line of business, and it would be good if he could tell the rest of us. Regarding a windfall tax, Conservative Members believe in getting more investment into the North sea and exploiting our domestic resources. The roundtable that my right hon. Friends the Chief Secretary to the Treasury, the Prime Minister and the Business Secretary hosted yesterday showed that there is enormous appetite to invest more in the UK. A windfall tax would put off that investment.
Mr McFadden
Of course, there are global factors driving up energy prices and inflation in many countries, but what singles out the UK is this Government’s decision to impose a tax rise on working people right when the impact of rising energy bills is hitting people the hardest. Why are the Government so determined to make the cost of living crisis worse now with these tax rises, particularly when the Treasury is briefing anyone—including the Government’s own Back Benchers—who will listen that the Tory party is planning pre-election tax cuts?
Rishi Sunak
The right hon. Gentleman talks about exceptionalism with regard to policy. Part of the reason we are in this situation with energy prices is the decisions made by the previous Labour Government, in particular on nuclear energy, which we are now rapidly having to make up for. We are also committed to tackling the unprecedented backlogs in the NHS, getting the waiting lists down, and recovering from covid. Every single penny of the health and social care levy will go to the people’s No. 1 priority and, although things are difficult, I know that is what people want to happen.
Derek Thomas (St Ives) (Con)
I represent an area in Cornwall where a large number of people are on the state pension. I know, from conversations that I have had with the Chancellor, that he is particularly concerned about that demographic. Given the critical rise in the cost of living, I wonder whether one of the easier routes to address it would be to reinstate the triple lock for next year.
Rishi Sunak
My hon. Friend is right to highlight pensioners and to support them in the way that he does. He will know that we made a decision temporarily to move to a double lock this year because of the anomaly in the reported earnings, which would have meant a very large rise statistically that would not have been justified or fair in the circumstances. That said, I am pleased to say that pensions are now at their highest level relative to earnings in over three decades because of the Government’s policy on the triple lock, and we continue to be the party that will support those who need our help.
Alison Thewliss (Glasgow Central) (SNP)
Sanctions against Putin’s regime are absolutely necessary, but they will add an extra layer of economic harm on top of the existing Tory cost of living crisis. The Chancellor must use the upcoming spring statement to deliver an emergency package of support to householders and businesses, whose costs have spiralled out of control. Will he turn his buy now, pay later energy loan into a grant, reinstate the universal credit uplift, increase other benefits with inflation and scrap the VAT and national insurance hike that will damage so many people?
Rishi Sunak
What we are doing is tackling the cost of energy. Unlike the hon. Lady’s party, we believe in the future of the North sea and we are investing in it. We want to make sure that we promote the jobs that are there. On upcoming support for energy costs, the Scottish Government have plenty of powers on welfare and tax, and if they think that they can make a difference, they should use them.
Andy Carter (Warrington South) (Con)
Cherilyn Mackrory (Truro and Falmouth) (Con)
Henry Smith (Crawley) (Con)
Dr James Davies (Vale of Clwyd) (Con)
The Chief Secretary to the Treasury (Mr Simon Clarke)
Some 130,000 young people across Great Britain have benefited from the kickstart scheme so far, including in my hon. Friends’ constituencies. That is lower than the 250,000 jobs that the scheme could have funded, but the scheme was designed at a time when unemployment was expected to peak at 12%. The reality is that, thanks to the intervention by my right hon. Friend the Chancellor, the economy has recovered better than expected and unemployment peaked at 5.2% in 2020.
Andy Carter
I am grateful for that response. Last week, I went to visit Sigma, a great local business in Warrington South, which has employed nine people under kickstart, and that has made a massive difference. Can my right hon. Friend tell me what steps the Government are taking to help businesses retain young people as we approach the end of the six-month kickstart programme?
Mr Clarke
It is great to hear about my hon. Friend’s visit to Sigma, and I know that 180 kickstart jobs have been created in his constituency as of December. For those on universal credit who do not immediately continue into full-time unsubsidised work, support will continue to be available from the young person’s work coach to help them use their newly gained skills, and support will also be available from the wider DWP youth offer.
Cherilyn Mackrory
Last week I visited the jobcentre in Truro where they told me that kickstart has been a huge success. We have had around 620 kickstarters across Cornwall, providing urgently needed jobs for our young people. Given that the scheme will end this month, can my right hon. Friend expand on what the Department will do to support skills and apprenticeships, particularly for young people across Cornwall, so that we can be at the heart of the levelling-up agenda?
Mr Clarke
Spreading opportunity by levelling up our skills base is at the heart of our wider levelling-up White Paper—it is one of the core missions that it sets out. The Government will invest £3.8 billion in skills by 2024-25, which is equivalent to a cash increase of 42% compared with 2019-20. On apprenticeships, I am happy to say that last year more than 3,000 people started apprenticeships in my hon. Friend’s county of Cornwall. We want to see that work continue.
Henry Smith
Over recent months, many young people in Crawley have benefited from the kickstart scheme. In contrast to every Labour Government, which have all left office with unemployment higher than when they started, does my right hon. Friend agree that the way to recovery for our economy and the cost of living is the multi-billion pound plan for jobs that the Government are delivering?
Mr Clarke
My hon. Friend is right about the Government’s record on employment, just as he is right about the Labour party’s record on unemployment. To continue to boost employment, wages and living standards, he rightly references our plan for jobs, which is proving to be an enormous success. In total, the Department for Work and Pensions spend on labour market support will be more than £6 billion over the next three years.
Dr Davies
I recently visited the Dyserth Falls holiday park in my constituency, which is under renovation, to speak with some of the 40 members of the public who have been employed there under the kickstart scheme. Will my right hon. Friend join me in congratulating all those who have taken part in the scheme, especially those who have been given permanent jobs, and set out what ongoing support there will be for those who have completed their placements?
Mr Clarke
As my hon. Friend knows, I know Dyserth very well. In fact, I will be there the weekend after next. I join him in congratulating all those who have taken part in the kickstart scheme, especially those who have secured full-time jobs. Kickstart is, of course, only one part of the wider package of support for young people that is under way. The DWP’s youth offer, which runs until 2025 and is worth £60 million, includes a 13-week youth employment programme, supported youth hubs and, crucially, specialised youth employability coaches.
Alison McGovern (Wirral South) (Lab)
Just in case colleagues in the House did not quite hear the Chief Secretary, he admitted that kickstart has failed. It promised young people 250,000 jobs and got barely half of that. But it is worse than that. The National Audit Office said about kickstart that there was
“limited assurance over the quality of the work placements created by the scheme, or whether jobs created by employers would have existed anyway”.
So in relation to the failed kickstart scheme, what does the Chief Secretary make of the following economic expression: “dead weight loss”?
Mr Clarke
With respect to the hon. Lady, of whom I am a great admirer, that is an unfair characterisation of the success of the scheme. It clearly needs to be situated in the wider context. In fact, the British economy has performed much better than anyone expected when the scheme was set up. There are robust processes in place that make sure that we genuinely are adding additional value. So work coaches have to certify that the people on the scheme are eligible for it and would have been unlikely to find work without it. Employers need to demonstrate how the jobs created are additional. Finally, it is important to contrast this scheme with the last Labour Government’s future jobs fund, which reached its total far more slowly and was far less effective. This scheme has got 130,000 and rising young people into work. It has been a great success.
Peter Grant (Glenrothes) (SNP)
It is interesting that the Minister can call kickstart such a resounding success, given that last month the Public Accounts Committee said that the Department that runs the scheme does not know what success looks like because it launched the scheme without any idea as to what the success criteria would be. It also has no way of knowing whether the young people who are referred to kickstart jobs are the right young people and it is not properly evaluating the longer term support that employers give to those young people. Does the Minister agree with the PAC report, which was endorsed by a Committee consisting of a majority of Conservative MPs?
Mr Clarke
No, I do not agree with that report. It is an unfair characterisation of a response that was put in place at pace to meet an unprecedented crisis in our employment market. The wider success of our policy on youth employment is best measured by the fact that in January there were 500,000 more employees aged under 25 than there were in January 2021. The kickstart programme has played its full part in helping to make that possible.
Gareth Thomas (Harrow West) (Lab/Co-op)
Businesses in the steel industry are more likely to be able to support the kickstart scheme if the Government manage to get Donald Trump’s unfair tariffs of 25% on British steel exports lifted, as the Japanese and the EU have already achieved. Has the Chancellor spoken to the Chief Secretary about this issue, and if not why not?
Mr Clarke
The hon. Gentleman makes a very good point about tariffs. Obviously, the Government believe in free trade and it is something that we want to see happen too. As a Member of Parliament who represents a steel-making constituency, I am keenly aware of this as an issue. The Department for International Trade leads on the issue, and I know that the Secretary of State and her predecessor have had long and ongoing conversations with their American counterparts about getting those tariffs lifted.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
With the scheme failing to attract the numbers that were predicted by over 80,000, will the Minister outline what structure is in place to attract those who have lost out, to ensure that those young people have opportunities to find a life career? Will the new scheme be UK-wide?
Mr Clarke
Youth unemployment is lower today than it was pre-pandemic, and the wider success of the scheme has to be judged in the context that the worst-case scenario that we were looking to offset never came to pass because of the interventions that we made. If a scheme does not achieve the headline numbers that were anticipated at the time it was established because the wider economic performance of the country was so much better than anticipated, that is a success, not something to bemoan.
Carolyn Harris (Swansea East) (Lab)
The Exchequer Secretary to the Treasury (Helen Whately)
Gambling contributes over £3 billion per annum to the Exchequer. The Government keep gambling duties under regular review to ensure that the sector continues to pay its fair share. The Department for Digital, Culture, Media and Sport is reviewing the Gambling Act 2005, after which the Government will assess the impact of any reforms on the Exchequer.
Carolyn Harris
Analysis carried out by both NERA Economic Consulting and Landman Economics concluded that, given that online gambling is “labour intensive” and predominantly based offshore in avoidance of UK corporation tax, its net impact on the British economy is negative, particularly once the direct cost to Government, estimated by Public Health England to be £647 million, is factored in. Will the Government support the upcoming reviews of gambling regulation—the Minister said it is under active consideration—and welcome any moves to reduce gambling harm and the associated cost to society and the economy?
Helen Whately
I know that the hon. Lady is a committed campaigner on gambling as chair of the all-party parliamentary group on gambling related harm. Specific to her point about offshore gambling operators, I am sure that she knows that since 2014 gambling duties have been taxed on a “place of consumption” basis, so offshore operators pay taxes on profits related to UK gambling.
To the broader point of the gambling review, I spoke to the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Croydon South (Chris Philp), who is leading DCMS’s work on gambling, just yesterday, and I assure the hon. Lady that the Government stand ready to take action where there is evidence that vulnerable people, such as those suffering from gambling addictions, are being exploited by gambling operators.
Andrew Bridgen (North West Leicestershire) (Con)
The term “gambling” covers a broad spectrum of activities. Does the Minister share my concerns that over-zealous regulation of the gambling industry as a whole could lead to some damaging unintended consequences, such as driving vulnerable individuals to the black market, which is completely unregulated, loss of revenue to the Exchequer and damage to the greyhound and horse-racing industries, which employ lots of people?
Helen Whately
My hon. Friend makes an important point. There is the basic principle that people should in general be free to spend their money as they see fit. There are about 100,000 jobs in the gambling industry in this country. It is important to ensure that we protect people who are most vulnerable from exploitation, and I know that the gambling review I mentioned is looking carefully at the best way to do that.
Stephen Farry (North Down) (Alliance)
The Financial Secretary to the Treasury (Lucy Frazer)
Details of ministerial discussions are not normally disclosed. Treasury Ministers have meetings with a wide variety of organisations in the public and private sectors as part of the process of policy development. From April, universal credit and many other benefits will be uprated by 3.1%, the rate of the consumer prices index in September 2021. In addition, the Government are providing support worth over £20 billion across this financial year and next to help families with the cost of living.
Stephen Farry
Millions of families across the UK, both in and out of work, depend on universal credit and other benefits. As the Minister knows, the 3.1% uprate was set in September. We are now seeing inflation of over 7%. The Joseph Rowntree Foundation, the Trussell Trust and many other organisations highlight the real jeopardy that families are now facing. They have no plan B. Indeed, families are facing cuts in real terms of over £500 over the course of the year. Surely that decision has to be reassessed in the light of changing circumstances.
Lucy Frazer
CPI has been the default inflation measure for the Government’s statutory annual review of benefits since 2011, as the hon. Gentleman knows, but we are fully aware of the impact on households of the cost of living. That is why we are providing £20 billion of support, whether that is through £9 billion of support to help with rising energy bills or through universal credit. As he also knows, we have cut the taper rate so that families can keep an additional £1,000 annually in their pockets.
Nigel Mills (Amber Valley) (Con)
Does the Minister think that the uplift coming next month will be enough to get people all the way through next winter? If she recognises that there is a problem, will the Government consider bringing forward next April’s increase to this autumn, to give people a bit more money to help with their heating and food bills next winter?
Lucy Frazer
As my hon. Friend knows, we have introduced a range of measures to support families, both working and not working. The price of energy is now set until the autumn, and a significant amount of money is going in now and in the autumn.
Bill Esterson (Sefton Central) (Lab)
The Financial Secretary to the Treasury (Lucy Frazer)
Work is the best route out of poverty. We are investing more than £6 billion in labour market support over the next three years to help people to move into and progress in work. In addition, analysis published at the last autumn Budget shows that in 2024-25, tax, welfare and spending decision since the 2019 spending review will have benefited the poorest households the most as a percentage of income.
Bill Esterson
But real wages are falling by the largest amount since 2014, inflation is set to hit 8% and the energy price cap is going up. In the cause of fairness and sound economics, when will the Financial Secretary and her colleagues admit that it makes sense to use the record profits of North sea oil and gas to help ordinary people, who face a cost of living crisis?
Lucy Frazer
The hon. Gentleman knows from the statistics announced this morning that wages are up in real terms compared with pre-pandemic levels. In fact, unemployment is now almost back to pre-pandemic levels, and is lower than in Canada, France, Italy, Spain and Australia. On his specific question, the North sea oil industry already contributes additional taxes through a 40% rate, which is double the amount that other corporations pay.
Virginia Crosbie (Ynys Môn) (Con)
My constituency has one of the lowest rates of gross value added in the UK and is desperately in need of jobs and investment. The island is known as “energy island” because we have wind, waves, solar, tidal and—hopefully—nuclear. I was delighted to hear the Chancellor mention nuclear and the fact that he has committed to the £120 million future nuclear enabling fund, but will he also commit to publishing the criteria and bidding process, so we can move at pace in this vital sector?
Lucy Frazer
It is great to see the good work going on in my hon. Friend’s constituency. Of course, her question is for our right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, who I am sure is considering it carefully.
Nia Griffith (Llanelli) (Lab)
Lucy Allan (Telford) (Con)
The Chief Secretary to the Treasury (Mr Simon Clarke)
People are rightly angry that fraudsters stole from covid support schemes, as am I. When the schemes were launched, there was cross-party consensus that we needed speed to protect jobs, and because of our action unemployment peaked at 5.2%, not the 12% predicted at the start of the pandemic. We designed the schemes to prevent as much fraud as possible, and lenders stopped nearly £2.2 billion of potential fraud from the bounce back loan schemes. We continue to take action on multiple fronts to recover money that was claimed fraudulently.
Nia Griffith
It is not just a matter of fraud; it is a matter of incompetence as well. The National Audit Office has been scathing about the UK’s wasteful spending of £37 billion on private contractors to deliver the test and trace system in England, while we in Wales had a more efficient system through partnership with the Welsh Government and local councils. What guidance is the Chief Secretary giving Departments on how to avoid giving such wasteful contracts in the future? Does the guidance include considering, wherever practicable, the delivery of service contracts through public authorities, where any profit remains in the public purse?
Mr Clarke
We always continue to encourage best value, and this is at the heart of all Treasury documents on the use of public money. On the hon. Lady’s point about test and trace, it is very important to reaffirm that the great majority of the costs associated with this scheme were about testing as opposed to tracing, and it was only that scheme that allowed us to come through the enormous challenges of the period, particularly prior to the availability of the vaccine, in a way that allowed our society and our wider economy to keep going to the extent that they could.
Lucy Allan
My right hon. Friend the Chancellor has been incredibly agile in responding to exceptional crises. As he tackles the impact of Putin’s war on our economy, will the Minister take every measure to accelerate growth, including reducing taxes on fuel and energy?
Mr Clarke
As has been discussed earlier in this session, as my hon. Friend rightly highlights, the Government recognise that households do need support with the rising cost of energy. Indeed, the Chancellor has already provided support worth some £9.1 billion for the financial year 2022-23. On her wider point about boosting growth, the Chancellor outlined in his Mais lecture the importance of the Government investing in capital, people and ideas, so that we can strengthen the economy and make sure that the UK is best placed to succeed in what is a challenging set of circumstances.
James Murray (Ealing North) (Lab/Co-op)
Just in the last seven days, we have learned that 7 billion items of personal protective equipment were not fit for purpose, the Government are burning 500 lorryloads of it a month and former Treasury Minister Lord Agnew admitted that the lack of anti-fraud measures in the Government’s covid business support packages meant it was
“happy days if you were a crook”.
When billions of pounds of public money have been lost through the Chancellor’s incompetence, is the Minister ashamed to be hiking taxes on working people by billions of pounds next month?
Mr Clarke
I am afraid the hon. Gentleman misunderstands the situation in regard to PPE. Over 97% of the stock that was ordered was suitable for use. Indeed, when it comes to the wider figure covering the PPE piece, £4.7 billion of that represents PPE that will be used by the NHS, but which was procured at a greater price than it carries today owing to the scarcity that prevailed at that time, and another £3.3 billion represents PPE that can be used in non-medical settings, and the Department of Health and Social Care has already sold and donated stock in this category.
On the wider fraud point, this goes back to my earlier answer that we had to design these schemes at pace to protect jobs—I think this was agreed across the House—and we rightly, I think, made sure that that was the priority. We then built in the protections that were needed, and the protections have made sure that we are able to pursue anyone who has defrauded the taxpayer.
Alison Thewliss (Glasgow Central) (SNP)
Lord Agnew’s evidence to the Treasury Committee last week was a damning indictment of this Tory Government’s “terrible complacency”—his words—about fraud and protecting public money, and he does not buy what the Minister says about working at pace either. Lord Agnew anticipates that there will be an “avalanche of claims” from the banks on the state guarantee of the bounce back loan scheme arriving at the Treasury in the coming weeks, so can the Minister tell the House what actions he is taking to prevent yet further billions of public money from waltzing out the door in the midst of a cost of living crisis?
Mr Clarke
On the hon. Lady’s point, the Government set up the £100 million taxpayer protection taskforce at the Budget back in March 2021, and that taskforce is expected to recover between £800 million and £1 billion from fraudulent or incorrect payments over the next two years. That builds on the work that has already been done, which saw Her Majesty’s Revenue and Customs recover £536 million in 2020-21. Other agencies of the state are also involved in this important work. The National Crime Agency has made 17 arrests, 106 directors have been disqualified as of February 2022, there have been 48 bankruptcy restrictions and 13 companies have been wound up in the public interest in relation to bounce back loans.
Damien Moore (Southport) (Con)
The Exchequer Secretary to the Treasury (Helen Whately)
At last autumn’s Budget and spending review, we announced a comprehensive package of investment to level up the UK and encourage regional growth. This included the £4.8 billion levelling-up fund, the £2.6 billion shared prosperity fund and £1.6 billion of investment in the next generation of the British Business Bank’s regional investment fund.
Damien Moore
Does my hon. Friend agree that town deals are one of the most progressive ways of supporting regional growth, and that the one for Southport will kick-start our economy locally?
Helen Whately
I congratulate my hon. Friend on his hard work to secure the £37.5 million town deal for Southport, which will be truly transformative for his constituents. That funding will bring in more private investment to his constituency, building on public funding and providing new jobs and opportunities for his constituents. It will be levelling up in action.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The stark reality in the north-east is that we have seen rising child poverty and reliance on food banks in recent years, and the poorest households lost £1,000 when the Government cut universal credit in the autumn. Rising prices look set to take away another £1,000 from households, before the economic impact of what is happening in Ukraine. Ahead of the spending statement next week, may I urge the Treasury please to do more to tackle the destitution that will be inevitable if nothing is done to intervene to support households in the north-east, who will then support the local economy to grow?
Helen Whately
As other Ministers have outlined, we are supporting households with the rising cost of living, including a package worth £21 billion of support. In particular we are supporting those on universal credit by reducing the taper rate to ensure that work pays. Looking further ahead, through our commitment to levelling up we are investing across the country in skills and infrastructure, with the levelling-up fund to improve growth, boost prosperity, opportunities and pay, and thereby improve people’s standard of living.
Bim Afolami (Hitchin and Harpenden) (Con)
The Minister will be aware of the positive contribution that financial services can make to levelling up all over the country. With that in mind, and with the work of my all-party group on financial markets and services on levelling up, will she commit that the Treasury will work with the industry to spread opportunity within the financial services sector, to help that sector spread opportunity through all regions of this country?
Helen Whately
My hon. Friend makes an important point, and I know he is knowledgeable about this sector. It is important to remember that financial services are to the benefit of the whole country, with two thirds of jobs in financial services being outside London and the south-east. Financial services are absolutely an important part of our ambitions for levelling up.
Tim Farron (Westmorland and Lonsdale) (LD)
In rural communities, especially Cumbria, we are deeply concerned about the Government’s apparent lack of concern about growth in the rural parts of this country. Is the Minister aware of the enormous damage being done to farming in the UK, just at the moment when we need our farmers the most, by the reduction in basic payments? That started in December when farmers lost between 5% and 25% of their basic payment, without any availability of anything to replace it for years to come. Will she intervene now to keep basic payments where they currently are, so that we can keep Britain farming?
Helen Whately
I thank the hon. Gentleman for his question. I also represent a rural constituency with significant agricultural interest, and I assure him that we have protected agricultural funding through this Parliament. We are committed to levelling up across all parts of the UK, in rural as well as urban areas.
Mr Steve Baker (Wycombe) (Con)
What steps is the Minister taking with our right hon. Friend the Secretary of State for Levelling Up, Housing and Communities to ensure that areas that need levelling up are able to attract private sector investment?
Helen Whately
That is a very important point. Levelling up is not just about public sector investment—indeed, the lion’s share of investment in future growth in our economy will come from the private sector. One important thing that the British Business Bank is doing with its regional fund is crowding in private sector investment, so that we will get more private sector investment on top of the public sector investment we are putting in.
Dan Jarvis (Barnsley Central) (Lab)
The shared prosperity fund could be one of the Government’s most effective means of encouraging regional growth across the UK, but only if the investment goes where it is most needed. Does the Minister believe that the Treasury should apply the funding commitments that were rightly made to Cornwall also to the Tees Valley as well as to South Yorkshire?
Helen Whately
We are making a substantial investment through the shared prosperity fund and other funds across the country. We have committed to ensuring that the shared prosperity fund will be at least as much as parts of the country received before through EU funding, and I am committed to the hon. Gentleman’s area just as much as to Cornwall and other parts of the UK.
Peter Gibson (Darlington) (Con)
The Exchequer Secretary to the Treasury (Helen Whately)
By investing in local infrastructure, the levelling-up fund will strengthen local economies, boost job opportunities and improve the day-to-day lives of people across the UK. So far, we have committed £1.7 billion to 105 projects, and at the end of the month the Department for Levelling Up, Housing and Communities will publish its monitoring and evaluation strategy for the funding.
Peter Gibson
With £23.3 million invested through the towns fund, £105 million for Bank Top station and 1,700 civil service jobs coming to Darlington, we are a leading example of how the Government’s levelling-up agenda is benefiting communities in the north-east. The second round of the levelling-up fund will continue that work. Will my hon. Friend outline the timescales for the delivery of that round?
Helen Whately
My hon. Friend is a fabulous campaigner for Darlington, as evidenced in all the funding that his local town has secured. I am a regular visitor to Darlington, as are my Treasury colleagues, and have seen those investments already making a difference. He asks about the second round of the levelling-up fund. It will open for business this spring, with further details to be published shortly.
Mr Ben Bradshaw (Exeter) (Lab)
The Economic Secretary to the Treasury (John Glen)
We continue to review and reform our regulatory and enforcement approach to ensure that, as illicit finance evolves, our responses do too. We have announced an unprecedented package of sanctions, including against prominent Russian oligarchs. Last night, we brought forward the Economic Crime (Transparency and Enforcement) Act 2022 to crack down further, and we will continue to do further work on the economic crime Bill in the next session. We have also brought a new kleptocracy cell into the National Crime Agency to tackle those explicit threats.
Mr Bradshaw
But it took a group of anarchists to seize Deripaska’s London mansion yesterday, so when will the Minister do what Europe and America have already done and seize rather than just freeze Putin’s cronies’ assets? When will he close the loopholes that still allow them to escape sanction by putting their assets in their family members’ names or using shell companies based in British overseas territories?
John Glen
The Government have worked closely with the US and the EU on a whole range of interventions. We have sanctioned 500 individuals and entities, including 386 members of the Russian state Duma. We have also worked with the US on the expulsion of banks from the SWIFT banking system, cut off 3 million Russian companies from capital markets and seen $250 billion wiped of Russian stocks. We will continue to work closely with our allies to ensure that our response continues to be comprehensive.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
The Government have once again delayed the long-overdue reforms to Companies House that could have deterred illicit finance, prevented covid fraud and provided vital information to the authorities. I will ask the Minister an important question, and I want him to update the House accurately. How many Russian-linked individuals and businesses have been wrongly given Treasury-backed covid-related business support?
John Glen
We worked to give widespread support to lots of individuals across the economy. I cannot give the hon. Lady the exact chapter and verse on individuals who have been supported, but we will continue to work on Companies House reform, which will be the most significant reform of the companies register in 170 years, and later this year we will publish a second economic crime plan and fraud action plan to address the threats that we continue to see.
Marsha De Cordova (Battersea) (Lab)
The Chancellor of the Exchequer (Rishi Sunak)
In response to Russia’s unprovoked aggression against Ukraine, the Treasury has helped deliver a world-leading package of economic sanctions to deliver severe consequences to the Russian economy. Across insurance, finance, trade, public and private capital markets, clearing, SWIFT, central bank assets and, indeed, bank asset freezes, we are ensuring that the Government play a leading role in making sure that Putin’s aggression does not go unpunished.
Marsha De Cordova
Families in my constituency are facing the cost of living crisis, and the planned real-terms cut to social security will force more of them into poverty and into having to make impossible decisions between eating and heating their home. According to the Trussell Trust, one in three on universal credit were not able to dress for the weather last month as they could not afford appropriate clothing or shoes. That is unacceptable. Will the Chancellor increase the level of social security support in his spring statement next week to alleviate some of the worst impacts of the cost of living crisis?
Rishi Sunak
As is common to all other years, welfare is uprated annually by September’s CPI. That will be the case next year as well, as my right hon. and learned Friend the Financial Secretary laid out. For those on universal credit we have cut the tax rate to ensure that work pays, delivering a £2 billion tax cut to 2 million on low incomes—the best route out of poverty.
Giles Watling (Clacton) (Con)
Rishi Sunak
My hon. Friend is right to point out the importance of fuel as a cost for both businesses and households. That is why I am proud that we delivered the eleventh freeze in fuel duty in a row. That has delivered huge savings for households and businesses over the past several years.
Rachel Reeves (Leeds West) (Lab)
Millions of people are worried sick about soaring bills. Meanwhile, BP says it has more cash than it knows what to do with and has compared its record profits from inflated prices to a cash machine. Those profits are not being used to fund new investment. They are going on dividends and share buybacks, so why will the Chancellor not make North sea oil and gas companies pay their fair share of taxes to tackle the enormous cost of living crisis?
Rishi Sunak
The hon. Lady talks about a fair share. It is worth bearing in mind that oil and gas companies are already taxed at double the rate of all other companies: 40% versus 19%, currently. Last year saw the lowest amount of investment in the North sea on record—just a few billion pounds. As my right hon. Friends who were at the roundtable yesterday know, there are billions of pounds of projects waiting to be unlocked. We want that investment and those jobs here in the UK.
Rachel Reeves
That is not happening with the share buybacks. The Chancellor is totally out of touch. He does not seem to understand how the cost of living crisis is affecting the least well off in society, as campaigner Jack Monroe highlighted. The Institute for Fiscal Studies confirmed that the poorest households face an inflation rate 50% higher than the richest households. The Resolution Foundation warns that between 2020 and 2022, 700,000 more children will have fallen into poverty. That is devastating, but it is not inevitable. The Chancellor can and must do more in the spring statement to provide people with real help, not just a loan. Why is he so intent on shielding oil executives, instead of protecting the poorest in society?
Rishi Sunak
The best way to help people cope with rising energy costs and bills over time is to make sure we have a diversified and secure supply of energy, more of which comes from here at home. I share the hon. Lady’s concern for those on the lowest incomes. I am proud that all the evidence points to the fact that the decisions made by this Government over the last few years have benefited those on the lowest incomes the most. We have protected those who need our help, and we will continue to do so.
Andrew Bridgen (North West Leicestershire) (Con)
The Financial Secretary to the Treasury (Lucy Frazer)
It was very interesting to meet my hon. Friend, together with his colleagues from the all-party parliamentary group on investment fraud, and to hear his idea. As we discussed, Her Majesty’s Revenue and Customs is very keen to make clear which schemes do not work. That is why, in the Finance Act 2022, the Government legislated to allow HMRC to name promoters and the schemes they promote at the earliest possible stage, to warn taxpayers of the risk of entering into those schemes, and to help those already involved to exit avoidance.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
Rishi Sunak
We are spending record amounts on supporting those who are disabled. Relative to the OECD, I think we are spending in excess of the average for other leading countries. My right hon. Friend the Secretary of State for Work and Pensions has a particular programme of support in place to help those who are disabled to move into employment; plans were announced earlier this year.
John Penrose (Weston-super-Mare) (Con)
Lucy Frazer
My hon. Friend is right to highlight the effect of a high effective tax rate on incentives to work. That is why the Government reduced the universal credit taper rate from 63% to 55% and increased the universal credit work allowance by £500 per year, which is essentially a tax cut for the lowest-paid, worth more than £2 billion in 2022-23, and means that 1.9 million households will keep an extra £1,000 per year on average.
Bill Esterson (Sefton Central) (Lab)
The Exchequer Secretary to the Treasury (Helen Whately)
The changes to the taxation of red diesel were announced back in 2020, were confirmed in spring 2021 and are coming in this year, so businesses, including in the sector that the hon. Member refers to, have had plenty of time to prepare. It is absolutely right that we tax fuels that are highly polluting; unfortunately, diesel is one of them.
Jill Mortimer (Hartlepool) (Con)
Helen Whately
My hon. Friend is an active campaigner for the steel sector in her constituency. I can assure her that energy-intensive industries such as steel receive substantial support from the Government, including free allowances from the emissions trading scheme and the £315 million industrial energy transformation fund, to help them to cut energy bills.
Sammy Wilson (East Antrim) (DUP)
A statutory instrument entitled the Customs (Amendment) (EU Exit) Regulations 2022 was on yesterday’s Order Paper for approval by the House. It amends the customs arrangements for the United Kingdom by excluding Northern Ireland from them, changing the term “United Kingdom” to “Great Britain”. That runs totally contrary to the assurances given by the Prime Minister that Northern Ireland would remain part of the UK customs territory; it runs contrary to article 4 of the Northern Ireland protocol; and it now means not only that Northern Ireland is part of the single market under the European Court of Justice, but that it is outside the UK customs territory. The motion relating to the instrument was not moved. Can the Financial Secretary give an assurance that it will not be brought back to the House until there has been a meeting to explain why it is necessary, what its impact on Northern Ireland is and why the Government have brought it forward?
Lucy Frazer
I am happy to answer that question. I understand completely the concerns of people in Northern Ireland about the impact of the protocol; the right hon. Member will know how seriously the Government take those concerns and how we are negotiating with the EU to ensure that we get the right arrangement for Northern Ireland. I can give him assurances here and now about what the statutory instrument was doing: it was making very minor technical changes in a number of areas, for example in relation to the provision of information that might have to be given but that was never previously enforced. It was actually easing up the requirements for those who operate trade between Northern Ireland and Great Britain. These were technical changes, and I am very—
Mark Menzies (Fylde) (Con)
Helen Whately
My hon. Friend has made an extremely good point. Now is the moment for us to go full steam ahead with our transition away from fossil fuels. We are investing in nuclear, we are accelerating our progress on renewables, and we are boosting energy efficiency in homes across the country. This is how we will bring bills down, improve our energy security and tackle climate change.
Mrs Emma Lewell-Buck (South Shields) (Lab)
When the Government set up the coronavirus business interruption loan scheme, they recklessly failed to agree any guidance on early repayments. As a result, businesses are now being charged extortionate fees and are facing bankruptcy. Why is the Chancellor putting the profits of unscrupulous lenders above the recovery of our small businesses?
The Economic Secretary to the Treasury (John Glen)
He is not doing that. The schemes were set up in various ways, depending on the size of businesses, and it will be for the individuals who borrowed money to engage with the lenders to refinance those loans on a case-by-case basis.
Felicity Buchan (Kensington) (Con)
Helen Whately
My hon. Friend has made an important point. We recognise that some people living in mansion blocks are part of a heat network and are not covered by the price cap. I draw my hon. Friend’s attention to the £144 million in discretional funding that went to councils as part of the recent £9 billion energy support package, and to forthcoming legislation in which we will give Ofgem new powers to regulate prices in the sector as a matter of priority.
Chris Bryant (Rhondda) (Lab)
We really must start seizing assets and not just freezing them. That is the only way in which we can make sure that the money goes towards the reconstruction of Ukraine. Would it not also be a good idea for us not just to look at the really famous people like Abramovich, but to look at the people who own £750,000 properties in the UK and who may be the cousins, brothers, sisters, parents or some other proxy of Russian oligarchs in the UK? Must we not also do far more to tackle the personal finance of President Putin, much of which, I am told, is in the UK?
John Glen
As ever, the hon. Gentleman has made a powerful point about a very important matter. Work with our allies is ongoing to establish how we can deepen our response in a co-ordinated way in order to make a real impact on illicit finance.
Sir David Evennett (Bexleyheath and Crayford) (Con)
The Chief Secretary to the Treasury (Mr Simon Clarke)
My hon. Friend has made an excellent point. He is right to champion the value of apprenticeships, in which the Government keenly believe. I had a great roundtable with apprentices in Newcastle recently, and heard for myself just what a difference they are making both to their employer and to the wider economy.
Owen Thompson (Midlothian) (SNP)
It is estimated that the Chancellor’s smash and grab on national insurance will raise £13 billion. By happy coincidence, at the end of the financial year the Chancellor will have an extra £13 billion-worth of borrowing, because the Government have not met the borrowing expectations. Will the Chancellor use that happy coincidence to scrap the tax on jobs?
Rishi Sunak
The forecast for the public finances will be updated next week. As for jobs, I am happy to confirm that, according to today’s figures, there are record numbers of people on payrolls, record numbers of vacancies, and, indeed, more people in work now than before the crisis—and the unemployment rate is now lower than, or at the same level as, it was before coronavirus hit.
Mr David Davis (Haltemprice and Howden) (Con)
The Government have repealed many of the powers in the Coronavirus Act 2020, but they have not repealed the Act itself. This means that the Treasury can still order Her Majesty’s Revenue and Customs to start support schemes such as furlough without recourse to Parliament. Control of expenditure is Parliament’s first responsibility, so are the Government going to repeal the Act in total, or will the Treasury take action to give the proper powers back to Parliament?
Rishi Sunak
I would be very happy to look into the matter that my right hon. Friend raises.
Shale Gas Production
(4 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Lee Anderson (Ashfield) (Con)
(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy to confirm what the Government’s current stance is on shale gas production in the UK.
The Minister for Energy, Clean Growth and Climate Change (Greg Hands)
In response to Putin’s barbaric acts in Ukraine and against the Ukrainian people, we need to keep all our energy options open. We have always been clear that the development of shale gas in the UK must be safe and cause minimal disruption and damage to those living and working in nearby sites. This is not a new position. Shale gas and new approaches could be part of our future energy mix, but we need to be led by the science and have the support of local communities. That was in our general manifesto, on which my hon. Friend and I stood at the last election.
The pause on fracking implemented in November 2019 on the basis of the difficulty in predicting and managing seismic activity caused by fracking remains in place, and we will continue to be led by the science in our approach. We are clear that shale gas is not the solution to near-term issues. It would take years of exploration and development before commercial quantities of shale gas could be produced. Additionally, fracking relies on a continued series of new wells, each of which produces gas for a relatively short time. Even if the pause were lifted, there are unlikely to be sufficient quantities of gas available to address the high prices affecting all of western Europe and it would certainly have no effect on prices in the near term.
As the Business Secretary has said, we will continue to back our vital North sea oil and gas sector to maximise domestic production while transitioning to cheaper, cleaner home-grown power at the same time. We will shortly set out an energy supply strategy that will supercharge our renewable energy and nuclear capacity, as well as supporting our North sea oil and gas industry.
Lee Anderson
Last Wednesday, the Secretary of State for Business told this House that
“it did not necessarily make any sense to concrete over the wells”.—[Official Report, 9 March 2022; Vol. 710, c. 354.]
Given that the wells at the Preston New Road site in Lancashire are the only two viable wells in the whole of the UK, pouring concrete down them would be the end of the shale gas industry in the UK. That would be an inappropriate step at this time. We are in the midst of an international crisis, and as the Prime Minister has said, the west has become addicted to Russian gas. We must rectify that immediately; it is a national emergency.
The House was assured last week that the Department for Business, Energy and Industrial Strategy and No. 10 agreed that those wells should not be filled. However, Government rhetoric is not being matched by action on the ground, and Cuadrilla, the company that owns the wells, has spent the last six days trying to get hold of anyone in the Government or the Oil and Gas Authority to get confirmation that it no longer needs to carry out the abandonment process, but it is being ignored. Officials are dragging their heels and, with just days to go, Cuadrilla is legally obliged to plug the wells by 30 June. The OGA keeps confirming that. The Business Secretary says that Cuadrilla should “formally request an extension”, but that is nothing but jobsworth mentality. It is just kicking the can down the road, and we will be back here having the same argument in a few weeks’ time.
Can I ask the Business Secretary why he does not just give practical effect to the words he uttered last week and instruct the OGA to reverse the decision to concrete over the wells? That is what Cuadrilla is waiting for. Either the Government think those wells should be filled or they do not. To concrete or not concrete, that is the question; to frack or not to frack. If we do not want to see concrete being poured down our only viable shale gas wells in the middle of an energy crisis, the Business Secretary needs to act quickly.
As western civilisation grapples with an energy crisis, I am at pains to understand why the Government are risking jeopardising Britain’s long-term energy security over some tiny procedural nonsense. The course of action is clear to me—[Interruption.] I hear some chuntering in the House today, but I challenge any MP in this House to come to my constituency and speak to some real people who are struggling with their gas bills. Not one person in this place has to worry about paying their gas bill, so those Members should hang their heads in shame.
Greg Hands
I thank my hon. Friend for his engagement, and I know he has a long-standing interest in energy on a number of fronts. I commend him for his continuing interest.
Nothing has changed in Government policy relating to fracking and shale gas. On the international crisis, my hon. Friend says the west is addicted to Russian hydrocarbons, but I would say that the UK is not. Last year we imported 4%, but typically we get less than 3% of our gas from Russia. The figures for oil are higher, but they are nothing like the eyewatering percentages we see among our European friends and partners.
On the holes in Preston New Road, Lancashire, the Oil and Gas Authority—the independent regulator—proactively approached Cuadrilla as recently as this week to ask whether it will apply for an extension. However, Cuadrilla has not made a straightforward application to do so. As with any licensee, Cuadrilla can apply for a straightforward extension from the Oil and Gas Authority if it wants to extend the deadline.
My right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy and I met the Oil and Gas Authority today, and it is ready to consider Cuadrilla’s letter and potential application. The Government hope the regulator would consider it favourably.
Edward Miliband (Doncaster North) (Lab)
I congratulate the hon. Member for Ashfield (Lee Anderson) on securing this urgent question. He is right to try to smoke out the Government’s position, and it is no wonder he is confused—I think he will remain confused after the Minister’s reply.
Let us be clear that the Government placed a moratorium on fracking because they said it is dangerous and they could not rule out
“unacceptable impacts on the local community.”
The Business Secretary said in 2020 that “fracking is over,” and just a few days ago he wrote
“it would come at a high cost to communities and our precious countryside”.
Yet last Wednesday, just three days later, the same Business Secretary said
“the Government are open to the idea.”—[Official Report, 9 March 2022; Vol. 710, c. 355.]
Yesterday, at Chatham House, the Minister ruled it out. The Government are all over the place.
I will ask some questions, because this issue does matter. It is about our energy security, it is about communities that are deeply worried about the impact of fracking, and it is about the climate crisis. Has the Minister or his Department seen any scientific evidence since the 2019 moratorium that suggests fracking might not be dangerous and might be safe? If he does not have any evidence, why is he approaching the Oil and Gas Authority to ask it not to concrete over the wells, which was the original decision? If he does not think fracking is safe, why is he sowing uncertainty in communities across our country? If he does not have any evidence, will he assure the House that no review of fracking—no nods, no winks and no nudges—will be announced in the relaunch of the Government’s energy strategy? Clarity on this matters.
Finally, would it not be the best thing that the Government can do to guarantee energy security—the Minister should be clear about this—to have a green energy sprint by ending the onshore wind moratorium, ending the objection to solar power, embracing tidal power, moving forward with nuclear and having a properly funded national energy efficiency programme?
Greg Hands
I am delighted to see the right hon. Gentleman at the Dispatch Box. He says he is confused, but I have been absolutely clear that Government policy is unchanged from the 2019 manifesto. I am not sure what he finds confusing about Government policy being unchanged.
We did not put our 2019 manifesto on an Ed stone, but it is available online for anybody to see the manifesto pledges on which all Conservative Members ran. Government policy is unchanged, with or without an Ed stone. The right hon. Gentleman says we are sowing uncertainty. No, we have given absolute certainty. Government policy is unchanged from the pause announced in December 2019. There is no review. This is a science-led policy, and support from local communities would be needed if there were to be a change.
Finally, we heard about the “green energy sprint”, which is extraordinary. Since the right hon. Gentleman was Secretary of State for Energy and Climate Change in 2010, we have increased the proportion of our electricity generation coming from renewables from 7% to 43%. In any normal terms, that would be a sprint, but it is also a marathon, in the sense that we have done that over 12 years. It has been almost a “sextupling” of the amount of energy coming from our renewables since he was in office. He talks about nuclear, but he will also remember the 1997 Labour manifesto, which said that Labour saw “no economic case” for new nuclear power stations. He has the cheek to come to the Dispatch Box today to urge that we get on with nuclear. The Government are getting on with nuclear and with renewables, doing exactly the green energy sprint that he has suggested.
Mr Speaker
I call the Member whose constituency has been mentioned, Mark Menzies.
Mark Menzies (Fylde) (Con)
Let me outline at the start that this does affect my constituency, and I am disappointed that my hon. Friend the Member for Ashfield (Lee Anderson) did not have the courtesy to give me advance notice that he was going to be asking a question pertaining to my constituency.
These are not viable wells. Will the Minister just confirm that? The wells in 2012 that caused the first national moratorium were concreted over, with the blessing of Cuadrilla. The last thing it wanted to do at that point was frack again in those wells, so it dug 3 miles away. Both those wells have triggered the second national moratorium, so they are not viable wells. Will the Minister confirm that and stop this nonsense now?
Greg Hands
My hon. Friend illustrates well the point about the importance of keeping local community support if this were to happen. As stated in our manifesto, this was based on what local communities felt at that time. I do not think any local community felt it more strongly than my hon. Friend’s in Fylde. On the process, we have been clear that if Cuadrilla were to apply to the Oil and Gas Authority to extend that deadline, this would be considered by the OGA in the usual way. I repeat that the Secretary of State and I spoke to the OGA just this morning to confirm that.
Alan Brown (Kilmarnock and Loudoun) (SNP)
It is a rare thing in the Chamber but I completely agree with the hon. Member for Fylde (Mark Menzies) and the Minister’s opening remarks: now is not the time for knee-jerk reactions. Given that we have this energy crisis, now is the time to stay strategic and not make daft decisions. Clearly, doing fracking would not do anything to change the west’s reliance on gas, even if, as the Minister’s says, the UK does not rely on Russian gas. He can reconfirm that fracking would not release enough gas to change the international market price, so we would still be paying the same wholesale prices. Is it not the case that there is not enough geological and scientific coring information, to the right depths, to understand the viability of extraction, let alone the risks of seismic tremors, which, as we have already heard, occurred at Preston New Road? Therefore, fracking should be ruled out, in the way the Scottish Government have done. Do we not need to invest heavily in renewables? We keep hearing about nuclear from those on the two Front Benches, but committing £63 billion of capital and financing costs to Sizewell C is madness. Our approach should be straightforward renewable energy. I keep going on about pumped storage hydro. Last week, the Secretary of State said that I had been going on about it for 18 months and that it is a good solution but he needs to assess value for money. When are we going to get that value for money? When are we going to get a change to the transmission grid charging system, which is blocking the deployment of Scottish renewables? We need to invest more in tidal stream, to increase the floating offshore target and to set an onshore wind target as well. Let us maximise investment in renewable energy.
Greg Hands
I thank the hon. Gentleman for that response. He is right in the first part of what he says: fracking is unlikely to change gas prices—or UK fracking is unlikely to do so. It is certainly unlikely to change it quickly, which is what I said in my opening statement. He is also right to point to the importance of following the science, and geological information is really important. However, I have to say to him that on nuclear he continues to be wrong. The SNP’s ideological hardcore opposition to nuclear is against Scotland’s interests. We have just seen the closure of the Hunterston nuclear power station, which provided enough nuclear energy to supply every home in Scotland for 31 years. It was a great Scottish, as well as UK, solution. Our other great source of gas is the North sea, where I would like to see the SNP approach becoming more constructive and supportive of the North sea transmission deal that the UK Government did a year ago.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I support what my right hon. Friend is saying about the need for more renewables and for nuclear. We all support the objective of net zero by 2050, but we are now in a gas supply crisis. The Government insist that we are in a European market; Europe is heavily dependent on Russia. We need to produce as much gas as we can. It is a simple question: is shale an option for the Government in the immediate term, or not? That is what we need to know; otherwise, the wells will be concreted over, which the Government said they do not want.
Greg Hands
I thank my hon. Friend for his support for renewables, nuclear and net zero, all three of which belong together, right at the centre of Government policy. He said that there was a gas supply crisis, but I would not characterise it that way. The UK has very secure sources of gas supply: around about 50% comes from the UK continental shelf; a further 30% comes from Norway, our great friend and NATO ally; and 20% is bought on the international market. There is obviously an issue with the price, but I do not share in my hon. Friend’s characterisation of a gas supply crisis.
Finally, my hon. Friend asked whether shale is an option. I repeat that Government policy in this area is unchanged: if people can show that the scientific base and the local community support is there, Government policy would be to allow shale if that turned out to be where those two key considerations led.
Geraint Davies (Swansea West) (Lab/Co-op)
As the Council of Europe rapporteur on hydraulic fracturing, I know, as may the Minister, that 5% of the methane produced by fracking is leaked through fugitive emissions. As methane is 80 times worse for global warming than carbon dioxide, that makes fracking worse for global warming than coal, so instead of looking at fracking will the Minister redouble his efforts on renewables, in terms of wind farms in England and marine in Wales? Will he also look to store renewable energy in organic batteries which, when produced at scale, are cheap and do not result in pollutants?
Greg Hands
There were a few questions there. In respect of the data on emissions, it is impossible to judge what UK fracking emissions would look like because data has not been produced on that.
The hon. Gentleman says that fracking is worse than coal; I can be certain that there are more emissions in the production of liquefied natural gas than in the UK continental shelf natural gas. That is for sure—there is two and a half times as much. I would expect the hon. Gentleman to rally behind our call to maintain the UK continental shelf production that is currently ongoing and to import, hopefully, less LNG.
The hon. Gentleman talks about redoubling in respect of renewables. We have Europe’s largest installed offshore wind capacity, which we are already committed to quadrupling. That is twice the rate of the redoubling for which he called.
Mark Jenkinson (Workington) (Con)
The moratorium introduced ridiculously low seismic limits that appeared to have been written by someone who did not understand the Richter scale. Should not the decisions be taken by local planning authorities, with community involvement, and the limits set at levels similar to those we might see for development in London, for example? Should we not be locking in the community benefits of fracking sites?
Greg Hands
I strongly commend my hon. Friend for his support for Government policy on energy, and particularly nuclear. He mentioned seismic limits; I was not the Energy Minister at the time, but I believe that tens of thousands of complaints came in to the Geological Society at the time of the drilling. That showed the magnitude of the public impact of some of the drilling at the time.
On my hon. Friend’s point on local consent, I refer him to what I said earlier about the importance of the need to bring local communities on board in respect of any of these projects. With pretty much every type of energy production, we need to bring the local community on board, and that is the case for fracking as well.
Sammy Wilson (East Antrim) (DUP)
There has been much hand-wringing in the House about the cost of energy, energy security and our reliance on outside sources, yet within our own country we have sufficient gas to do us for 50 years. Does the Minister think it is sensible to turn our back on the jobs and taxes and to spend money to buy gas overseas when we have an indigenous source, a pipeline across the United Kingdom and one of the richest and deepest shale gas seams in the world?
Greg Hands
We are not turning our back on anybody. We have been absolutely clear that it is vital for us to keep our energy diversity and our energy security. We are not turning our back on anybody or anything, but Government policy on this issue is unchanged: we need to see both the scientific evidence and the local community support before we can proceed, as we set out in our 2019 manifesto.
Alexander Stafford (Rother Valley) (Con)
It is reassuring to hear from the Government that the support of the community is going to be at the heart of any decisions, because I can tell the Minister that in Rother Valley there is no community support for fracking. In Harthill and Woodsetts, where there is the potential for wells, nobody wants fracking—in fact, the fracking site in Woodsetts is mere yards from an old people’s retirement home. Will the Minister confirm that the Government will focus more on renewables, and not on fracking, because every single minute that they spend talking about fracking is a minute not spent talking about renewables and a minute that engineers are not working on renewables? We need to get renewables online, not fracking.
Greg Hands
My hon. Friend, who also takes a keen interest in energy matters, and particularly renewables, makes a really strong point about the need to maintain local support and local consent for these projects. He is quite right that we have a strong focus on renewables. The Prime Minister himself describes the country as the Saudi Arabia of wind. The commitment to renewables comes right from the very top of our Government and exists throughout the Government.
Cat Smith (Lancaster and Fleetwood) (Lab)
In his contribution, the hon. Member for Ashfield (Lee Anderson) characterised his constituents as “real people”; I assure him that the people of Lancashire are real people. The people of Lancaster and Fleetwood whom I represent are completely opposed to fracking in Lancashire, and I am sure that I speak for my friend the hon. Member for Fylde (Mark Menzies) as well when I say that.
The reality is that shale gas production is currently paused. The Minister says we would need support from local communities; does he hear loud and clear that Lancashire says no and people in Lancashire do not want fracking? Will he reassure my constituents that the wells will be concreted over and that the Government will consider turning the pause into a ban on fracking?
Greg Hands
What happens to the wells is soon to be a matter of discussion between the Oil and Gas Authority and Cuadrilla. On what the hon. Lady said about maintaining local support, the support of the local community is incredibly important. It is stating the obvious to some extent, but as Energy Minister I have discovered that for all energy projects—whether offshore wind, onshore wind or solar—we need local community support, and fracking would be absolutely no exception to that.
Dame Andrea Leadsom (South Northamptonshire) (Con)
I pay tribute to my hon. Friend the Member for Fylde (Mark Menzies), who has done so much over many years to support his constituents, who have been adamantly opposed to shale gas extraction. However, frankly, the Opposition talk a load of tosh when it comes to how we are going to meet our net zero ambitions. My right hon. Friend the Minister has set out our amazing achievements in renewables and in our commitment to achieving net zero. Nevertheless, to meet the exponential increase in electricity demand in order to make the transition, we have to look at the lowest-emission fossil fuel, which is gas. If we have safe and secure resources in this country, which we undoubtedly do, it is absolutely right that we talk to communities about whether they would like to have free gas in return for committing to shale gas extraction in their area. That is only right.
Greg Hands
A huge part of the Government’s delivery on renewables in the past 12 years is down to my right hon. Friend, first as Energy Minister and then as Secretary of State at my Department. In both those roles, she drove forward a big increase and made some of the early, tough decisions on renewables, so I absolutely pay tribute to her.
My right hon. Friend is absolutely right on gas: the Climate Change Committee itself has said that the use of gas can still be consistent with reaching net zero in 2015, and—let us face it—it is vital for our energy mix today. She also made some strong points about how we keep local consent and local communities on board. In respect of all forms of energy, that is one of the central principles that the Government are keen to maintain.
Justin Madders (Ellesmere Port and Neston) (Lab)
The Government say that the policy has not changed, but I wonder why it is so hard to make a decision. Ellesmere Port had a public inquiry more than three years ago for a shale gas development and we still have not had a decision from the Minister as to whether that will proceed. Is not it time that the Government stopped trying to have their cake and eat it, actually made a decision and rejected fracking once and for all?
Greg Hands
The policy is clear and laid out in our 2019 manifesto. It is not possible for me at the Dispatch Box to comment on individual decisions as they may be being assessed by the Department, but the policy in 2019 is clear that there is a pause on future fracking developments.
Paul Maynard (Blackpool North and Cleveleys) (Con)
I thank the Minister for what he has just said, which my constituents will welcome. Many in this House seem to think that I represent South Dakota rather than Blackpool, which has eight out of the 10 most deprived neighbourhoods in the country, all of which are deeply fearful of higher energy costs. Does not the Minister agree that this debate about fracking is a complete distraction from the task in hand of finding speedy, effective and efficient measures to reduce energy costs in the short run, not a further long-term gamble on unproven technology that is many years away from delivering anything meaningful to my constituents?
Greg Hands
My hon. Friend has represented Blackpool incredibly ably for the past 12 years and knows his community well. He makes, again, a strong point about the importance of community consent. He also makes the point about the speedy implementation of alternative, cheaper and cleaner forms of energy. That is why we announced, just a couple of weeks ago, a contracts for difference renewables auction on an annual basis to do precisely that.
Wera Hobhouse (Bath) (LD)
Renewables are the cheapest form of energy. It is a well-established industry; fracking is not. Reading the room, I think it is very clear that that is understood here, so why do the Government not ban fracking altogether? The Government have already made new commitments to renewables, but is not now the time, given this new challenge—there is a new challenge; we might not call it a crisis—to double and treble on the plans that are already in the pipeline and make and plan for even more renewables than the Government are currently doing?
Greg Hands
The hon. Member calls on us to double or treble renewables. That is not good enough. We are going for the quadrupling—the quadrupling—of our offshore wind capacity in this decade. It is already the largest in Europe. We are not just doubling or tripling —we are quadrupling that capacity.
Kevin Hollinrake (Thirsk and Malton) (Con)
Around 85% of the beautiful constituency of Thirsk and Malton is covered by shale gas exploration licences, and we will need gas for many decades into the future, so, in principle, I am not against it. I happen to think that it would be easier to do exploration in the North sea. The energy experts who spoke to the Treasury Committee yesterday were clear that one thing hampering that is the lack of willingness from our banks to extend moneys to invest in exploration, because they are focusing on environmental, social, and governance goals rather than the national interest. Will my right hon. Friend work with the Treasury to make sure that our banks do support exploration because we will need this gas into the future?
Greg Hands
I thank my hon. Friend for that incredibly important question. I agree with him: in principle, I am not against shale gas either. He also raised the important question about banks and lending, particularly to the North sea. Let me be absolutely clear from this Dispatch Box: this Government welcome continuing investment in the North sea. That is absolutely part of our energy security and part of our energy resilience. If there is any further sign that banks need a signal from the Government—either from the Department for Business, Energy and Industrial Strategy or the Treasury—let me send that signal today: we want to see continuing investment in our UK continental shelf.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Does the Minister accept that biogas from landfill and sewage waste produces cheaper electricity than almost any other form of gas? If that is so, can we do more to up the volume of that production, as, I think, National Grid suggested some seven years ago?
Greg Hands
The hon. Member raises a very good point and a strong point. In terms of what defines something as being cheaper, there are different ways to cut that. It will depend on what the prevailing prices are of alternative sources of energy. He will know that, for example, gas prices are more than 15 times their five-year historic high, so much depends on what the other prices are out there. But as I said earlier, a strategy will be launched by the Government before the end of the month, which will address a number of the different questions in terms of where our energy supply will come from in future years.
Craig Mackinlay (South Thanet) (Con)
Diverse organisations such as the Climate Change Committee and the Net Zero Scrutiny Group, which I chair, agree on one thing: gas will be part of our energy mix to 2050 and beyond. That makes domestic supply a very sensible endeavour. I just put the benefits to the Minister: 75,000 potential jobs; tens of billions of investment; billions in terms of tax revenues; massive savings of CO2 compared with LNG inputs, which are truly horrific on CO2, given that they come in on a diesel ship; and the balance of payments positivity. Is there anything in that list that my right hon. Friend disagrees with? Finally, I implore him to send a note of thanks to the US Government who took the dash to shale gas extraction some time ago and it is on the back of that that they have mitigated a lot of our energy failure.
Greg Hands
I thank my hon. Friend for his question and for his continued interest. I am always happy to meet with his group to discuss these issues. He is absolutely right: domestic supply is very important. This is not the time to be wanting to increase imports of foreign LNG. That is one reason why we want to see a robust UK continental shelf producing UK natural gas. The point he makes about investment, jobs, tax revenues and so on would be considered in the round, but I point out the earlier point about seeing the scientific evidence first and the local community support as well.
Margaret Greenwood (Wirral West) (Lab)
Many Wirral West residents are extremely concerned that petroleum exploration and development licence No. 184 covers Wirral West. The Government’s failure to ban fracking leaves my constituency at risk of this dangerous technology that would extract fossil fuels at the very time that we should be moving to renewables. I led a successful campaign against underground coal gasification in the Dee estuary in 2013 and last month the Government told me that they no longer support the development of UCG. Can the Minister reconfirm whether that position is still the case, or whether it has changed, and will he ban both fracking and UCG?
Greg Hands
I have laid out clearly that our policy on fracking is unchanged. The hon. Member illustrates well the need to keep community support. When it comes to renewables, this Government’s record is one of the best in the world in delivering on renewables. We have the world’s largest installed offshore wind capacity, a new dedicated pot for tidal, and a lot of progress on solar and on onshore wind. All these things are helping the UK to produce a very diversified set of energy sources, which is a key part of our response to the current crisis.
Sir Edward Leigh (Gainsborough) (Con)
I commend the Minister for his clear answer today that, if an application for shale gas is made, there will be no political objection from the Government, but it must be determined on the basis of the support of the local community, by which I presume he means the local planning process. Can he confirm that that approach, based on local community support, will also apply to large solar farms?
Greg Hands
We have an established process in place for large solar farms and I am not changing policy on that. Solar offers a great addition to our armoury of renewables and it has been a big success in this country in recent times. When it comes to commenting on individual applications, I obviously cannot do that because that is the quasi-judicial role of my right hon. Friend the Secretary of State.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
At COP26, Wales signed up to the Beyond Oil & Gas Alliance, and we have comprehensively rejected fracking or any new hydrocarbon developments. Shale production will not meet our current energy needs; it will take too long, be too expensive and condemn our climate targets. Will the Minister assure me that he will respect Wales’s opposition to fracking, honour our COP26 pledges and not give in to climate deniers and fossil fuel opportunists?
Greg Hands
I remind the right hon. Lady that energy is reserved. However, I refer her to my earlier point about local community support being important in all our energy policy.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
The important thing in all these matters is to remain pragmatic. We will need gas even after we hit 2050, because gas, for example, will be the way we make hydrogen and hydrogen is clearly part of the way ahead. The reality is that the Minister knows that. I ask him, whether on shale gas or the North sea, to remain completely pragmatic—as Conservative Governments should be—to recognise that fact and not to allow this new ideological religion to take over everything. If we want to ask somebody, let us ask them whether they feel their gas prices should be rising at the current rate, or whether they would like lower gas prices.
Greg Hands
I agree absolutely with my right hon. Friend on both the importance of hydrogen and on the importance of being pragmatic. He and I were both elected on a 2019 Conservative party general election manifesto and Government policy is unchanged from that manifesto. That is the height of pragmatism: to stick to our manifesto and keep our options open.
Paul Blomfield (Sheffield Central) (Lab)
It is unfortunate that the boss of Cuadrilla has, with the support of the hon. Member for Ashfield (Lee Anderson), used the Ukraine crisis to reopen the discredited case for fracking. Will the Minister simply agree that we are better off investing in the renewable technologies of the future in terms of both our energy security and of meeting our climate commitments?
Greg Hands
We are investing massively in renewables. Our current round of allocations in the contracts for difference auction is larger than in any previous round. Within that, we have announced big support for offshore wind and other technologies and, for the first time, a dedicated £20 million pot for tidal.
Mr Steve Baker (Wycombe) (Con)
Real projects take time and money, as my right hon. Friend knows all too well from his work on nuclear and elsewhere. That is why we are here today. There has been inadequate communication between the decision makers in authority and the company, which knows it has to act now if it is to meet the deadline to put concrete in the wells. Will he please personally intervene to ensure that there is effective communication between the authorities and the company, so that we do not have to bring urgent questions such as this to the House?
Greg Hands
I thank my hon. Friend for his question and for his ongoing interest in all matters relating to energy, but I must say to him that Cuadrilla was told almost a year ago, in June 2021, of the requirement to decommission the two wells by the end of June 2022. It was given a huge amount of notice to do that. I mentioned earlier that the Secretary of State and I have spoken to the Oil and Gas Authority today, and I believe that further communication will happen with the company.
Caroline Lucas (Brighton, Pavilion) (Green)
I am glad the Minister has acknowledged that fracking would do nothing to increase our energy security, given that the energy would then be sold on global markets at international prices. I am also grateful that he talks of the importance of public consent. He will know that, given that only 14% of people support fracking and the fact that it would require 6,000 wells to replace even half the gas we are currently using, that will not happen any time soon. However, I urge him to do more on energy demand. This whole debate has been about energy supply—where is the action on reducing demand? That is where the Government are dragging their feet and that needs to change now.
Greg Hands
We have comprehensive investments going on through the heat and buildings strategy and other initiatives to ensure that energy demand is also addressed. But may I say this, because I think the hon. Member missed the last couple of occasions to put questions to the Dispatch Box? One thing I am sure of is that I am glad we did not follow the advice of the Green party back in 1989, when it scored its record result in an election with 15%. Its advice was that it was impossible to take action on emissions while simultaneously growing the economy. I am really glad that we decided to ignore that advice, because in the intervening 30 years we have grown the economy by 78% and reduced our emissions by 44%, comprehensively proving the Green party totally wrong.
Anthony Browne (South Cambridgeshire) (Con)
I speak as chair of the all-party parliamentary group on the environment. After the 1973 oil price shock wreaked economic havoc across the western world, different countries responded in different ways to ensure it never happened again. Denmark went for increasing wind power, Japan went for increasing solar, France went for increasing nuclear power and in Britain we went for increasing oil production in the North sea. Does my right hon. Friend agree that we should learn the lessons of history to ensure that we do not repeat the mistakes, and that the response to high international energy, oil and gas prices should not be to press pause on net zero, but to push full steam ahead with it, growing renewables and nuclear power?
Greg Hands
I think I am meeting my hon. Friend’s APPG either this week or next, and I am looking forward to that. He makes some strong points. Net zero is not part of the problem; it is part of the solution when it comes to both the transition and energy security. He talks about not repeating the mistakes of the past and he mentions nuclear. I will put on record that I am glad to see the conversion of the Labour party from saying it was anti-nuclear in its 1997 manifesto to now backing the Government’s nuclear programme. I welcome that conversion.
Bill Esterson (Sefton Central) (Lab)
My constituents in Formby have experienced test drilling, and they have very real safety concerns. I can assure the Minister that there is widespread community opposition to fracking in my constituency. Will he give my constituents certainty that fracking is ruled out? I will tell him how he can do it—by ending the moratorium on onshore wind and giving full-throated support to tidal energy, both of which are realistic options in the Liverpool city region.
Greg Hands
We have just announced a dedicated pot for tidal energy in the CfD round. In terms of providing certainty, may I suggest to the hon. Gentleman that he goes back to the 2019 Conservative party manifesto? The policy is unchanged from that. As a friendly, cross-party suggestion, if he wants to give his constituents some assurance, he could perhaps reprint that manifesto in full and distribute it to all his constituents, saying that there the policy is unchanged.
James Wild (North West Norfolk) (Con)
Gas suppliers are asking energy-intensive businesses, including a major paper mill in my constituency, for large up-front payments. As the Government review their energy strategy, will my right hon. Friend look at a proposal for a Government-backed payment guarantee scheme to help companies to manage cash flow and avoid the need for prepayment?
Greg Hands
Of course we are acutely aware of the difficulties that some energy-intensive industries face. My ministerial colleague, my hon. Friend the Member for North East Derbyshire (Lee Rowley), is looking at that all the time, and we review the situation constantly, but those schemes are often a matter for the Treasury and for agreement with the Treasury.
Matt Western (Warwick and Leamington) (Lab)
Back in 2014, the people of Warwickshire were very vocal in their opposition to proposed fracking licences across the county by Cluff Natural Resources. I am sure the Minister would agree that our objective must be to reduce energy demand. Why was it, then, that his Government tore up the zero-carbon homes legislation of the previous Labour Government, which would have seen 1 million new zero-carbon homes built from 2016, reducing the demand for energy in this country?
Greg Hands
I think the hon. Gentleman is inviting me to go back down memory lane to 2010. I will tell him this: thanks to the actions of this Government, the number of homes that are energy efficient and clear those minimal criteria has massively increased in the past 12 years. Ensuring that energy-efficient homes are there is something that this Government are delivering on.
Alison Thewliss (Glasgow Central) (SNP)
Evidence to the Treasury Committee yesterday reiterated that fracking is not worth doing, but also pointed out that part of the problem is the UK Government’s poor and inconsistent stewardship of our resources in the North sea compared with our neighbours in Norway, who have had a long-term and consistent plan for their resources. What commitment do the Government really have to their own transition plans—that was a question yesterday—and will they invest in renewables, which will benefit not only the environment and our economy but our energy security in years to come?
Greg Hands
I will give the hon. Lady two pieces of advice. First, she may want to visit north-east Scotland herself and see who the people there, particularly the people in and around Aberdeen, think are more supportive of the offshore sector in its entirety, including oil and gas and renewables—the Scottish Government or the UK Government, because the answer is normally the UK Government. Secondly, she asks whether I am still backing the North sea transition deal. That is a deal done by this Government, so of course we are still backing it. I keep asking her colleagues whether they back the North sea transition deal, and I never hear anything. If she is now announcing that the Scottish National party is backing it, then that is one clear gain from today’s contributions from the SNP.
Rachael Maskell (York Central) (Lab/Co-op)
It is time that the Government’s policy moved from a pause on shale gas production to a full stop. The people of this country have moved on, and so has the science. On Friday, the Under-Secretary, the hon. Member for Mid Norfolk (George Freeman), was in York looking at the BioYorkshire project, which will change and transform the future of our energy supply through the biofuels industry. Will the Minister not invest in that instead of old technology that simply will not deliver?
Greg Hands
We do invest in biofuels. My hon. Friend had a very good and productive visit, and I thank everybody in York who received him. We do invest, and we make sure that this is part of our diversified energy mix. Diversification is absolutely key in the space of energy, as other countries have perhaps learned to their cost.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
We cannot allow the current crisis to be used as an excuse to greenlight fracking, and, as the Minister said, any potential benefits to prices would not even be seen for years to come. The Government should be focusing on identifying other solutions such as investment in wind or solar power, or using new agricultural policy schemes in the UK to increase nitrogen use efficiency to reduce the waste of artificial nitrogen fertiliser. What alternative projects is the Minister considering?
Greg Hands
I thank the hon. Lady for that question. On hydrogen, I can confirm that one project pretty near to her constituency—the Whitelee wind farm just south of Glasgow, which I went to in November—is looking at how wind power, in this case onshore wind power, can be converted into hydrogen, with £9.8 million of UK Government support. That will drive buses and dustcarts in Glasgow city for many decades to come. It is exactly that sort of innovative project that the UK Government are backing.
Liz Saville Roberts
On a point of order, Mr Speaker. I asked the Minister very carefully about whether he would respect Wales’s policy of refusing further coal and gas. I am sure that most people in this House will appreciate that this aspect of energy is devolved to Wales, but he replied that energy is a reserved matter. Can you advise me, Mr Speaker, on how awareness could be established within this Government as to which powers are reserved and which powers are devolved to Wales?
Greg Hands
Well, Mr Speaker, I have nothing to change from my answer. What I can say is that we do have a very constructive relationship with the Welsh Government on areas of energy, as I always had on trade. They hold key levers in areas that are important on delivering energy, such as planning and skills, so of course it is in our interests, on behalf of the people of Wales, to work together as the UK Government and the Welsh Government.
Legal Aid
(4 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Lord Chancellor and Secretary of State for Justice (Dominic Raab)
Today I am publishing the Government’s response to the independent review of criminal legal aid. Copies are available in the House. Our proposals will put criminal legal aid on a stable and sustainable footing for the future. They will help to deliver this Government’s objectives of delivering swift access to justice, and they will usher in the reform we need at this crossroads moment as we build back a stronger and fairer society after this debilitating pandemic.
Covid-19 has been exceptionally challenging across our justice system. We owe our whole legal profession—the solicitors, the barristers, the judges and the court staff—an enormous debt of gratitude for keeping the wheels of justice turning over the past two years. Thanks to their efforts, we are driving down the court backlog and returning to a more normal way of working—in the interests of victims, witnesses, and of course the wider public. I thank Sir Christopher Bellamy for his comprehensive and invaluable review, along with his panel of experts and everyone else who contributed their views.
As I said, this is a crossroads moment. Our legal aid system needs investment if defendants are to have access to the highest-quality advice and advocacy, and if we are to ensure a sustainable criminal legal profession right into the future. To that end, Sir Christopher made two headline recommendations in his review. First, he proposed an increase of 15% in the various criminal legal aid fee schemes. I have accepted this in almost all respects, except where it risks introducing perverse incentives—for example, if it were to be applied to the rate of pages of prosecution evidence.
Secondly, Sir Christopher recommended an overall increase in investment in criminal legal aid of £135 million. Our package of reforms, announced today, matches that recommendation. As part of that, we will hold £20 million aside each year for longer-term investment, including reform of the litigators graduated fee scheme, the youth court, and the wider sustainability and development of solicitors’ practice, so that the system pays more, and more fairly, for the work actually done. On top of our additional funding to support court recovery, this will take taxpayer funding of criminal legal aid to £1.2 billion—the highest level in a decade.
Let me now unpack some of this for the House. In the short term, our cash injection will give a 15% boost to police station work, magistrates court work, much of the Crown Court work of advocates and litigators, and the work of solicitors in very-high-cost cases, as well as some of the smaller schemes. While getting pay and conditions right is clearly critical, Sir Christopher also made a number of wider systemic recommendations about the future of criminal legal aid that we also intend to take forward. We will reform fee schemes so that they properly and fairly reflect the way our legal professions work in the real world today. We will increase the diversity of our legal professions, promote a more sustainable criminal defence market, and harness the power of new technology.
Supporting a sustainable, diverse and stable criminal defence market depends both on the right fees and on having an adequate supply of legal practitioners, so we propose to review the standard crime contract to reduce barriers to innovative ways of doing business. We will offer grants for training contracts for criminal solicitors, and for solicitor advocates to gain higher rights of audience, expanding the supply of high-quality lawyers in the system. The Chartered Institute of Legal Executives has helped to remove barriers to entry into the profession and, in particular, has helped to promote non-graduate routes into the law. We want to take those reforms further again. So under our proposals, CILEX professionals will be able to become duty solicitors without having to achieve additional qualifications.
Work as a duty solicitor often involves unsocial hours and lengthy travel, making it hard for those with caring responsibilities, who are disproportionately women, to pursue a career in criminal defence. We want to make it easier for everyone to work in this area, so we will explore new ways of delivering remote legal advice in police stations. As Sir Christopher highlighted, the sustainability of the criminal solicitor profession is a particular challenge, so today I am proposing to expand the Public Defender Service, focusing on areas where more capacity is needed. That means that when there is risk of market failure, we will have a more flexible range of options to address it.
Next, Sir Christopher recommended that I propose an advisory board that will help represent all parts of the profession and shape future criminal legal aid policy. We will also gather views on how and where the innovative new technology that is helping us with the backlog can be used to even greater effect.
Our proposals respond to the full range of Sir Christopher’s review. They will increase efficiency across our system and deliver swifter justice for victims and defendants by incentivising early advice and resolution where that is right and proper. They will reinforce a more sustainable market, with publicly funded criminal defence practice seen as a viable, long-term career choice, attracting the brightest and best from all backgrounds and providing a further pipeline for the judges of tomorrow. It is only right that, as we reinforce the supply and sustainability of legal practice, we look closely at those who our legal system and our legal aid system are there to support, namely those who need legal representation and cannot afford to pay for it themselves.
The thresholds for eligibility for legal aid, which have not been raised for more than a decade, need to be reviewed, and it is timely to review them as we consider our wider reforms. Today, we have launched a separate consultation on legal aid means-testing. Our proposals will ensure a fairer justice system that targets legal aid towards the people who need it most—those least able to pay and the most vulnerable in our society. No one’s income or financial situation should stop them enforcing their legal rights or defending themselves when they have been accused of a crime. That is why this Government propose to significantly increase income and capital thresholds for civil and criminal legal aid, so that even more people in England and Wales will qualify for that support.
A funding boost of £20 million means that more than 2 million more people in England and Wales will be eligible for civil legal aid each year, and 3.5 million more will be eligible for legal aid to fund their defence at the magistrates court. We will exclude disputed assets from the civil legal aid means test. That move will particularly benefit victims of domestic abuse where the abuser is controlling assets. We will also remove the financial cap on legal aid eligibility in the Crown court for all defendants, so that everyone can access the right support at the right time.
At the same time, we will remove means-testing entirely for legal proceedings brought by parents whose children are facing the withdrawal of life-sustaining treatment. At the worst time in any parent’s life, those parents must and should have access to proper advice and representation, and they should not be expected to shoulder the burden themselves.
The proposals I have set out today represent a major investment in our legal aid system. They will ensure our justice system is fair, fit for the future and supported by a thriving and diverse legal profession, and that it delivers swifter and fairer justice across our society. I commend this statement to the House.
Afzal Khan (Manchester, Gorton) (Lab)
I thank the Justice Secretary for advance sight of his statement. I could not agree more that we owe our whole legal profession—solicitors, barristers, court staff and judiciary—a debt of gratitude for keeping the wheels of justice turning over the last two years. I pay tribute to their hard work in helping deliver justice for victims. I also put on record my thanks to Sir Christopher Bellamy and the rest of the team for their work.
Today’s announcement and response to the Bellamy review is welcome, particularly the Government’s commitment to increase legal aid rates by the 15% that Sir Christopher Bellamy recommended. The proposed restructure of the fee schemes will benefit members of the public and the profession alike. Similarly, we welcome having an independent advisory board to keep policy matters pertaining to criminal defence under review. Can the Justice Secretary outline the membership of the advisory board? Will he ensure that it is both representative and diverse, to help deliver meaningful change?
We will study many of the other measures that the Justice Secretary has mentioned, including the reforms of the duty solicitor scheme, in more detail. However, if the Government accept that criminal legal aid is in a perilous state, the same is surely true of civil legal aid, where decades of cuts and underfunding have crippled practitioners, and we are seeing the same recruitment and retention crisis. Urgent investment is necessary, and the Ministry of Justice has yet to publish any details on the civil sustainability review. We are suffering from serial underfunding of the entire legal aid sector, paired with a strict means test and a huge backlog in the criminal courts.
We know that justice delayed is justice denied, and victims are paying the price. Between 2012 and 2020, annual legal aid spending fell by 27% in real terms, largely as the result of changes under the Legal Aid, Sentencing and Punishment of Offenders Act 2012. That is £4.2 billion over a seven-year period—an average of £600 million a year. Essentially, we have a position where it is simply not financially viable to be a legal aid provider in many areas of law. The Government have accepted that to be the case in criminal law, but the maths is no different in civil law. There is no doubt in my mind that the legal aid sector has survived purely on good will, and I know that at first hand as a former lawyer. Chronic underfunding has brought the criminal justice system to its knees and created advice deserts across the UK. The steps outlined today are too little, too late.
There can be no surprise then that the profession has voted with its feet. Just a few days ago, 94% of the membership of the Criminal Bar Association voted to take industrial action. That will have a disastrous impact on the backlog in the criminal courts that existed well before the beginning of the pandemic. The Government may find the profession does not accept their response, their appreciation of the urgency or the time it will take to implement. Can the Lord Chancellor set out when the recommendations will take effect? Victims have waited long enough.
While the means test review for both criminal and civil legal aid is welcome, it is of little use to the public if they are eligible for legal aid but cannot access the provider base. Advice deserts are a direct result of the negative impact caused by reductions in legal aid funding. There is no justice if there is no access to justice.
The Justice Secretary claims this is a major investment in the criminal justice system, but make no mistake: it is the absolute bare minimum, and it does not fix a decade of Tory austerity. It fails victims at every turn. The erosion of access to legal aid represents a threat to the rule of law. It does not matter what legal rights an individual has on paper if they do not have the means to uphold them. The Government pay lip service to levelling up the country. When will they level up access to justice?
Dominic Raab
I thank the hon. Gentleman for what he said about the criminal legal aid proposals and the means test review. The announcement today is principally about criminal legal aid, and if I have understood him correctly, he backs us on all the criminal legal aid proposals.
Can I be clear in relation to the CBA ballot? If the hon. Gentleman welcomes our proposals, presumably he would agree, as I hope would others across the House, that it is totally unwarranted for the CBA now to proceed with strike action.
The hon. Gentleman asked about timing. On criminal legal aid, we will consult for 12 weeks. I would expect him to agree that we should follow the normal public law principles to have that consultation, otherwise we are exposed to a greater risk of judicial review.
Dominic Raab
The hon. Gentleman is nodding, and I am pleased that he does support that, even if some of his colleagues do not. We will then introduce a statutory instrument so that the proposals enter into force in October.
The hon. Gentleman talked about cuts to legal aid. I remind him that a previous Justice Secretary, Jack Straw, had plans to cut almost £200 million a year from the legal aid budget in 2009, as was made clear by the noble lord Lord Carter, who said,
“we had to break the hold of the criminal practitioners and force them to restructure so we could get more control over the costs of provision”.
In relation to our criminal legal aid proposals, we are ensuring that we have a sustainable system that supports practitioners but, above all, supports victims, witnesses and the society that we want to build after the pandemic.
I gently remind the hon. Gentleman that there will be 2 million more people with access to civil legal aid, which he mentioned, and 3.5 million more people with access to criminal legal aid in the magistrates courts. I thank him for his pretty fulsome support for the criminal legal aid proposals. I urge him to reflect on and recall the Labour party’s proposition before the 2010 election. I hope that he will be clear that it is totally unwarranted for the CBA to now proceed with strike action.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the Chair of the Justice Committee, Sir Robert Neill.
Sir Robert Neill (Bromley and Chislehurst) (Con)
This is a very welcome announcement and I congratulate the Secretary of State on taking on board Sir Christopher Bellamy’s recommendations. I join him in thanking Sir Christopher for his report and all those in the legal profession who have kept the system going under real difficulty. In appreciating the real difficulty that the profession has been undergoing in these times, does he agree that it is important, in order to get this right, to have the earliest possible increase and to take on board the words of the chair of the Bar Council, who says:
“We will work with the Ministry of Justice to make sure the funds are delivered swiftly, effectively, and fairly.”?
Can we meet the Bar Council and the profession in that spirit of co-operation and get this implemented at the earliest lawful opportunity?
Dominic Raab
My hon. Friend the Chair of the Select Committee is absolutely right and I welcome the constructive responses from the Bar Council and the Law Society. He is right that we must do it as swiftly as possible, but he makes an important point that we must do it lawfully. We are following the normal public law principles in having a 12-week consultation. As I have indicated, we intend to bring the proposals into force through an SI by October. I hope that that strikes the right balance. As he and, in fairness, the hon. Member for Manchester, Gorton (Afzal Khan) said, we extend our gratitude to all the lawyers—solicitors and barristers—judges and court staff who have done an incredible job through a very difficult couple of years.
Andy Slaughter (Hammersmith) (Lab)
Does the Secretary of State now accept that the swingeing cuts in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 have hobbled access to justice for a decade? Does he accept what the chair of the Criminal Bar Association, Jo Sidhu, said about the announcement today, which was that it
“will not be sufficient to retain enough criminal barristers to keep the wheels of justice turning and that means victims will be failed”?
If he does not accept that, what effect will it have on the backlog? He currently has a pathetic target to reduce the backlog to 53,000 cases over the next three years. If this is a groundbreaking change, what effect will it have on that backlog?
Dominic Raab
We will take no lectures from the hon. Gentleman given that he was there at the time that Labour was planning those swingeing cuts and, indeed, he backed them. Only now, when we have had to deal with the financial consequences of the economic mess that the last Labour Government left behind and put ourselves on a sustainable footing with the biggest investment in legal aid for a decade, he is complaining.
The Crown court backlog and the magistrates court backlog are coming down. Again, I did not hear from him a clear statement that strike action would be not only unwarranted but the last thing we need as we build back and recover in our Crown courts and magistrates courts.
Sir Robert Buckland (South Swindon) (Con)
I welcome my right hon. Friend’s statement. I am glad that he has followed the excellent recommendations of Sir Christopher Bellamy and I am glad to see the work that I started coming to fruition. He is right to draw a contrast between the approach and language in the Bellamy report and some of the hostile environment, frankly, that the criminal Bar had to put up with under the last Labour Government, which I remember very well. I also commend the raising of the threshold on civil legal aid, which will be one of the single biggest extensions of eligibility that we have seen in many a year. May I press him on the consultation period? I agree that he is absolutely right to follow public law principles, but I suggest that a slightly shorter period of eight weeks followed by an SI could deliver the necessary changes in an even shorter time.
Dominic Raab
I pay tribute to the huge amount of work that my right hon. and learned Friend did, which I was fortunate to inherit, before we came forward with our proposals. I agree with much of what he has said and done in this area. He is right to talk about the environment and the climate within which we talk about lawyers, because it was of course under the last Labour Government that they named and shamed lawyers for earning too much in fees. [Interruption.] The hon. Member for Hammersmith (Andy Slaughter) is chuntering from a sedentary position, but he is guilty of doing exactly that under the last Labour Government. We have not done that; we have engaged in a sober and sensible way because we understand the value of the legal profession, both barristers and solicitors.
I understand my right hon. and learned Friend’s call for a slightly shorter consultation period but, given the legal risk that I have been advised on, shortening it from 12 weeks to eight weeks does not seem the right thing to do. The consultation period is there not just as a legal matter but to ensure that we can tease out all the detail of the reforms, such as the implications of the fees and of the wider systemic reforms that we are introducing. It is right to take that time and I cannot see how a difference of four weeks can justify strike action in this case.
Ms Karen Buck (Westminster North) (Lab)
The Government cannot swerve responsibility for having made the largest cuts that have ever been made to the legal aid budget, which have brought civil and criminal providers to their knees. The whole service is held together by good will. As chair of the all-party parliamentary group on legal aid, I welcome every single penny that comes back into the service, but the fact remains that there is a crisis of capacity. Our inquiry report a few months ago showed just how many providers are closing and have been closing every month over recent years. I ask the Secretary of State exactly what steps he will now take to deal with the crisis in the provision of civil legal aid—he did not answer that in response to my hon. Friend the Member for Manchester, Gorton (Afzal Khan)—not least to accommodate the additional demand for service that will now flow into it as an admittedly welcome consequence of adjustments to the means test.
Dominic Raab
I think the hon. Lady was also around at the time when the Labour Government were planning their cuts. [Interruption.] She does not like it, but I remind her that it was Tony Blair who said that the Labour Government would
“derail the gravy train of legal aid”,
so I am afraid that she cannot come to the House with those crocodile tears. On her substantive point, however, the consultation on expanding the Public Defender Service and the 15% raise in legal fees will deal with the scarcity of legal aid practitioners in certain areas. As I have already said in relation to the means test review, millions of extra people will become eligible for civil legal aid, which she should welcome.
Jeremy Wright (Kenilworth and Southam) (Con)
I, too, welcome what my right hon. Friend has announced. He is right to focus on attracting bright young lawyers into criminal defence work. Does he also recognise that it is important to retain more experienced criminal defence lawyers who can take on the complex cases that, as he will appreciate, form a larger and larger proportion of the criminal courts caseload?
Specifically in relation to pages of prosecution evidence, I understand that my right hon. Friend is following one of Sir Christopher’s recommendations in that respect, but he will understand that that has been a proxy for the complexity and difficulty of criminal cases for some time. If we are not to increase fees in that regard, how does he intend to reflect those complex and difficult cases?
Dominic Raab
I agree with many of my right hon. and learned Friend’s points. He makes the right point that we must ensure that we still have the expertise we need at the high end of the profession. In relation to the rate of pages of prosecution evidence, he will know that we want to ensure that we do not encourage perverse incentives. I am not suggesting that that is done deliberately, but systemically it is something that we need to look at, and it is right to do so. Instead, as set out in the Government’s response, we will invite views on the longer term reform of the litigators’ graduated fee scheme to include the optimal basic structure of litigator remuneration, the role of pages of prosecution evidence in determining fees and what data should be collected to enable a thorough examination of litigator preparatory work. I hope that will address the points made.
Wera Hobhouse (Bath) (LD)
For years, the south-west has been called a legal aid desert. There is currently a huge backlog in the courts; legal aid is one part of the problem and workforce another. Justice delayed is justice denied. Can the Secretary of State tell me what immediate difference this statement will make to the thousands of victims in the south-west who are waiting for justice or who cannot even get justice now?
Dominic Raab
The proposals on the Public Defender Service and the means test review, and the increase in the fees, will all look across the board at areas where there is a scarcity of supply of practitioners willing to take on that work, in order to fill the gaps. I look forward to that and I hope that the hon. Lady will contribute to the consultation.
Laura Farris (Newbury) (Con)
The Government are to be congratulated on accepting Sir Christopher’s headline recommendations in full. I saw how much care and consideration went into that piece of work, but I would like to ask my right hon. Friend about chapter 13 of the report, which deals with fee income at the criminal Bar. Sir Christopher found that at every level of seniority female barristers earned less than their male counterparts, on average by 34%. He also found that non-white criminal practitioners earned less than white criminal practitioners by an average of 10%. What reassurances can he provide that this significant injection of public money will not be used to sustain potentially unlawful pay disparities?
Dominic Raab
I thank my hon. Friend for raising this very important point. In 2020, the gender balance at the point of entry among specialist criminal barristers was roughly 50:50, but at the senior level there is a much higher imbalance, with a ratio of 70:30 men to women. What are we doing about that? Our fees changes, for example in relation to duty solicitors, will particularly support younger lawyers. They will disproportionately help women with caring responsibilities.
We are also looking at further diversification through the roles and the rights that CILEX members can acquire. CILEX has allowed non-graduate routes into the profession, and I think 76% of its members are women. More generally, breaking down glass ceilings and barriers to entry into the profession is important. Beyond fees, the consultation will allow us to consult and to understand what more we can do systemically to attract a broader diversity of practitioners into the profession and then, critically, allow them to flourish.
Chris Bryant (Rhondda) (Lab)
The Secretary of State is right to say that we need to deliver swifter justice for victims, but if you will allow me a slight detour, Madam Deputy Speaker, do we not also need to deliver swifter justice to victims of war crimes in Ukraine? What is the Government’s attitude now towards the International Criminal Court? I think he would agree that attacking a nuclear power station or civilians is a war crime, but will he ensure that it is a war crime to initiate a war of aggression?
Dominic Raab
I share the hon. Gentleman’s interest in this subject and it is a timely, if circuitous, question, because I was in The Hague yesterday, where I met the ICC chief prosecutor and the president of the court; as he Gentleman knows, the ICC is independent and it is for it to determine those issues. I think I was the first Justice Minister to go there, and I was clear that we will provide a package of support, including financial and technical assistance, to enable the office of the prosecutor to do its job. We will be co-ordinating with our allies and our key partners so that is a concerted effort. The message needs to go out to Putin and to every commander on the ground in Ukraine that if they follow illegal orders they will end up in the dock of a court in The Hague and potentially in prison.
Bob Blackman (Harrow East) (Con)
I will resist the temptation to broaden questions about the statement still further.
I congratulate my right hon. Friend on his statement. Will he confirm that the intention is to increase the thresholds each year in line with inflation, so that we do not get to the same position we are in now? If so, what factor of inflation will he include on an annual basis? Finally, what impact does he expect this measure to have on the youth courts?
Dominic Raab
I thank my hon. Friend for what he has said. We do not plan to index the thresholds, but he makes a reasonable point. We will obviously need to keep them under regular review, but this is a big step change in the threshold and we will keep a close eye on the impact that inflation has on them. More broadly, he asks about the youth courts, which are a crucial part of the system. We are proposing a general uplift of 15% to magistrates courts fees, and the youth courts will be included in that uplift.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
Will the review of legal aid specifically look at how disabled people can enf